Companies optimistic about Northeast Ohio's manufacturing future, survey finds

Most manufacturers in Northeast Ohio are optimistic about what the future holds for them in the next year, studies show.

MAGNET recently partnered with Kent State University, Wells Fargo, and Bank of America to conduct a regional survey that addresses the priorities and concerns of local manufacturers of all sizes.

Nearly 300 companies responded, spanning various industries and geographic locations. Of those manufacturers, 74 percent comprised C-level executives and general managers, with 89 percent of all respondents representing small and mid-size companies (businesses up to 250 employees).

These responses indicated the following:

Manufacturers remain confident about their sector.
57 percent indicated they anticipate some economic expansion, and over 50 percent expect their companies to grow over the next 12 months. Small and mid-size manufacturers with 26 to 250 employees were most optimistic, roughly expecting 80 percent growth. Conversely, 41 percent said they expect a flat economy, while another 3 percent are bracing themselves for a recession.

Small manufacturers expect revenue growth, while larger companies predict additional capital expenditures.
42 percent of small manufacturers surveyed expect more than 10 percent revenue growth (compared to just 14 percent of larger companies); however, 57 percent of mid-size and 48 percent of large manufacturers expect an increase in capital expenditures.

While many companies have embraced new technology, many have neglected 3D printing.
While 57 percent of regional companies are using some kind of automation (mostly Internet of Things technology and connected machines), only 15 percent of small and mid-sized manufacturers are taking advantage of additive manufacturing.

Most manufacturers in Northeast Ohio are facing similar challenges.
Respondents indicated they were “very concerned” about the following:
– Rising cost of healthcare (62 percent)
– Attracting and retaining qualified workers (65 percent)
– Government policies and regulations (56 percent)

Over 83 percent also reported it was “somewhat difficult” or “very difficult” to attract qualified candidates for existing vacancies, with their biggest challenge cited as lack of skills, education, and/or interest.

Salaries in manufacturing have increased and will continue to rise.
69 percent say their wages have risen over the last two years, while 77 percent indicate they expect the numbers to keep climbing. However, number of employees has roughly stayed the same, according to nearly half of respondents.

Larger companies struggle the most with turnover.
While 74 percent of smaller companies reported turnover under 5 percent, larger manufacturers over 250 employees reported rates of 10 percent or higher.

Small and mid-size companies are more open to using consultants.
Approximately 70 percent of companies under 250 employees reported using between one and five types of consulting in the past for lean manufacturing, HR, information technology, and other services. The three most popular topics included sales and marketing (54 percent), quality management and ISO systems (53 percent), and IT/ERP systems (49 percent). In the future, small and mid-size manufacturers are looking for strategic growth planning, lean/operations improvement, and sales and marketing services.

To learn more about this study and what NEO manufacturers are looking for, download our 2017 NEO Economic Outlook presentation!

Want to know how MAGNET consultants can help you grow? Set up an appointment with our talented Growth Advisory Team by calling Linda Barita at 216.391.7766 or email linda.barita@magnetwork.org.

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Posted by Liz Fox in News

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